April 5 (Bloomberg) -- Svenska Cellulosa AB, Europe’s
largest paper-tissue maker, dropped the most in more than three
weeks in Stockholm trading after DNB ASA cut its rating and
lowered its earnings estimates on a strenghtening krona.

The shares fell as much as 2.2 percent to 164.9 kronor, the
biggest intraday drop since March 12. The stock traded 2 percent
lower at 165.2 kronor at 12:45 p.m. local time, giving the
company a market value of 116 billion kronor ($17.9 billion.)

SCA, based in the Swedish capital, has transformed itself
into a personal care business from a traditional paper company
after it finalized the sale of its packaging unit last year.
That has helped its share price gain 20 percent this year alone,
prompting DNB to lower its rating to hold from buy, Oslo-based
DNB analyst Haakon Aschehoug said in a note to clients today.

“Due to the recent share price appreciation we have
downgraded our recommendation to hold,” Aschehoug wrote in the
note. DNB has also reduced its 2013 estimate for earnings before
interest and tax by 5 percent because of “a stronger Swedish
krona and rising tissue prices,” the analyst said.

The Swedish krona has strengthened 2.6 percent against the
euro so far this year, and has also appreciated against most
other major currencies, including the U.S. dollar, Swiss franc,
Norwegian krone and British pound.

SCA is in the process of raising prices for consumer tissue
in Europe and has the ambition to increase prices by as much as
2 percentage points annually. While 50 percent of the earnings
estimate reduction stems from SCA’s Forest Product unit, DNB
also cut its Ebit estimate for hygiene products by 3 percent.